Why Silver Over-Achieves During Bull Markets

Nearly half a century ago Herbert and Nelson Hunt inherited a vast fortune from their father H.L. Hunt, a big-time Texas oil tycoon. With a strong shared belief in precious metals, the brothers turned their eyes to silver as a hedge against the raging inflation of the 1970s.

Their plan was far-fetched but simple – to buy up as much silver as possible and thereby drive up its price. They purchased a combination of physical silver and futures contracts to build their holdings. By 1979, the billionaire brothers had amassed enough silver to control approximately one-third of the entire world supply.

The price of silver skyrocketed from around $6 per ounce in 1979 to a peak of nearly $50 per ounce in January 1980 – a gain of over 700% in less than a year.

However, this drew the attention of regulators and other market participants. Fearing market manipulation, the Commodity Futures Trading Commission (CFTC) and exchanges implemented new rules to limit the buying of commodities on margin. This was a significant blow to the Hunt brothers, who were highly leveraged. Unable to meet margin calls, they were forced to liquidate many of their assets.

On March 27, 1980, known as "Silver Thursday," the price of silver collapsed, and the Hunt brothers' empire crumbled. They eventually declared bankruptcy and faced legal consequences for their actions...

Silver: The Small Market With Sky-High Potential

The Hunt brothers’ story is more than just a fun piece of financial trivia. It’s a lesson we can learn from today. You see, there’s a reason they decided to corner the silver market – instead of the stock, bonds, or even gold market... 

The Silver Market Is Seriously Tiny — As of 2022, the global domestic equity market is around $98.5 trillion. The global bond markets? Over $133 trillion... Meanwhile the market cap for investable silver bullion is estimated to be around $100 billion. Dozens of companies in the U.S. that dwarf the entire physical silver market many times over.

Gold Endures While Silver Is Consumed — Nearly all the gold ever mined is still around in some form – even jewelry that’s thousands of years old. But silver is very often used in devices like batteries and electronics, and eventually discarded. A large chunk of silver mined every year ends up in landfills, further shrinking the supply...

Opening A New Silver Mine Takes A Long Time — From discovery to production, the full process of opening a new silver mine can take anywhere from 10 to 20 years. When the global silver supply starts getting low, like it has for the last couple of years, you can’t just ramp up production next quarter. A silver mine could be under construction for several years before it yields its first nugget of silver.

Silver Might Be The Most Undervalued Asset Out There — When you look at the price of silver at its peak compared to today, you'll see that silver is still cheap. Stocks, bonds, oil, gold, rent, the price of meat... the price of all of these things have multiplied many times over the years. But silver is still around $25 compared to its $50 peak in 1980.

Silver Delivers BIG During Bull Markets — The smaller size of the silver market compared to the gold market means that it can be more volatile. Smaller markets are generally more susceptible to price swings due to lower liquidity and can be influenced more easily by large transactions.

The relatively small size of the silver market is why two brothers (albeit billionaires) were able to influence the silver market themselves – because when big money arrives, it can flood the silver market and set the price soaring.

When we take a look back at some of the biggest precious metals bull markets of the last century, you’ll notice that gold often starts off hot, but it’s silver that typically comes away with the biggest gains. 

You may also notice how 90% of the upward move tends to happen in the last 10% of bull market. That final spike is when everyone else jumps on the bandwagon, and that’s where you see the truly life-changing gains. That last final move is why it’s incredibly important to make sure you’ve accumulated enough silver BEFORE the bull market happens.

If you’ve heard our own Mike Maloney talk about silver hitting triple digits, this historical data says he might be onto something. If silver does reach those prices – whether it’s one year or five years from now – that would be a gain of over 300% from today’s prices.

I’m NOT saying that this will happen overnight — but with silver prices below $25/oz, now could be the perfect time to accumulate. Because when the precious metals bull market arrives, history suggests silver has more upside potential than just about any other asset.

We make it easy to get started with our InstaVault program, no matter what your budget. Or if you’ve been considering making a bulk purchase of silver, we’re offering a one-time sale on Silver Eagle Monster Boxes.

Sealed Silver Eagle Mint Cases, also known within the industry as Silver Monster Boxes, contain 500 American Silver Eagle Coins weighing 1 ounce each. Every Silver Eagle is beautifully designed and crafted from 99.9% pure silver.

And today until 5pm ET, you can use code EAGLE300 to receive a $300 discount off your Silver Eagle Monster Box. If you’ve been considering adding to your silver stash, this could be the perfect opportunity to stock up on Silver Eagles at a discount.

ADD SILVER TO YOUR PORTFOLIO TODAY

That’ll wrap up this edition of our weekly Silver September series. We’ll be back next week to touch on the different types of silver bullion as well as the differences between investment-grade silver bullion and low-quality numismatics.

Until next time!

Best,
Brandon S.
GoldSilver